United States Supreme Court Cases & Opinions

U.S. Supreme Court

Klein v. Board of Tax Supervisors, 282 U.S. 19 (1930)

Klein v. Board of Tax Supervisors of Jefferson County, Kentucky

No. 11

Argued October 29, 30, 1930

Decided November 24, 1930

282 U.S. 19

Syllabus

1. In Kentucky, corporate shares are not taxed to their owner if at least 75% of the total property of the corporation is taxable in Kentucky and the corporation pays the taxes thereon; but if less than 75% of the corporation's property is taxable in Kentucky, the shareholder is taxed upon the full value of his shares. Held that this classification is not unreasonable, and does not deny the equal protection of the law to shareholders who are taxed. P. 282 U. S. 22.

2. The property of shareholders in their shares, and the property of the corporation, are distinct property interests. A state may tax the corporation and also tax the shareholders, but is under no constitutional obligation, taxing the one, to tax the other also. P. 282 U. S. 23.

3. To tax a shareholder upon the full value of his share when a part only of the corporation's property is within the state is not to tax property outside of the jurisdiction of the state. P. 282 U. S. 24.

4. If a corporation is a fiction, it is a fiction created by law with intent that it shall be acted on as if true. The corporation is a person, and its ownership is a nonconductor that makes it impossible to attribute an interest in it property to it members. Id.

5. The Fourteenth Amendment does not require that land and stock in corporation be taxed at the same rate or by the same tests of value. Id.

230 Ky. 182 affirmed.

Appeal from a judgment of the Court of Appeals of Kentucky which affirmed a judgment sustaining on appeal an assessment made by a county board of tax supervisors.

Page 282 U. S. 22